What’s next for you?
I started in the financial planning industry at the age of 22. It was not uncommon for me to hear phrases such as “he’s a nice young man, but a little wet behind the ears.”
Now in my 30s, more and more clients are seeking younger financial advisors not out of choice, but out of necessity.
If you are a baby boomer, more than likely your advisor has, or is about to, retire. According to various studies, the average age of financial advisors is somewhere between 51 and 55, with 38% expecting to retire in the next 10 years.
Out of those surveyed, only 27% of advisors say they have a written succession plan in place. A succession plan is the process of choosing who can replace old leaders when they leave, retire or pass away.
What does this mean for you? It means that the person who got you into your retirement years is probably not going to be the person who gets you through them.
These sobering numbers illustrate just how important it is for you to work with a team of advisors. Working with a team can relieve advisor longevity risk and provide peace of mind knowing that your heirs can call on a familiar face to assist settling your estate.
I would encourage you to search for a registered investment advisor who operates as a fiduciary. As a fiduciary, these offices are required to dispense advice that is in your best interest.
Usually, these advisors have team members who specialize in different financial planning areas such as: retirement income, Social Security, asset allocation, tax and insurance planning, etc.
The most important question you can ask your advisor is “What is your transition plan?” If they do not have one, this is a red flag that your advisor has not planned far enough into the future. There is no “one size fits all” answer to the question.
Some plans may include grooming junior advisors to step up and lead the business, while others may include bringing in an outside strategic partner. Either way, this is not a conversation that you should shy away from.
This information should not be construed by any client or prospective client as the rendering of personalized investment advice. All investments and investment strategies have the potential for profit or loss, and there can be no assurance that the future performance of any specific investment or investment strategy including those discussed in this material will be profitable or equal any historical performance levels. Investment strategies such as asset allocation, diversification, or rebalancing do not assure or guarantee better performance and cannot eliminate the risk of investment losses. Any target referenced is not a prediction or projection of actual investment results and there can be no assurance that any target will be achieved. Kent Patrick is with Bush Wealth Management.
